Givot Olam Struggles with Oil Discovery

In 2004 Givot Olam announced an oil discovery in their Meged #4 well, the newly discovered ‘Meged oil field’ was estimated to contain 980 million barrels of crude; about 200 million barrels of that actually recoverable. Israel’s Ministry of National Infrastructures looked t the data,  confirmed the discovery and issued a production license to the company … that was six years ago. Givot Olam hasn’t actually produced any appreciable amount of the oil they discovered in 2004 and the Meged #4 was shut down due to ‘engineering problems’ after attempting a horizontal drilling process in 2005.

Last year Givot Olam tried to resurrect hopes of producing oil by drilling the Meged #5, south of it’s previous wells. The Meged #5, still under 13,000 feet deep (according to Givot’s drilling agreement with Lapidoth, the original planned depth was over 16,000 feet) and the drilling project is $4.9 million over budget; add to that an additional $6 – 7.5 million for production testing. Givot Olam only has $3.7 million in the bank, so they’ll need to raise more capital before anyone knows if the Meged #5 will be a commercial well.

Givot representatives stated last week (see below) that the “quantities of gas measured in the mud of the Meged 5 well is ten times the amount in all other wells in the Meged field.” But since no actual quantity was disclosed, there’s no way of telling whether the well is capable of producing commercial gas until testing is complete.

An oil ‘discovery’ of 980,000 million barrels in 2004 (the Givot Olam website states 2,000 million [2 billion] barrels) and still no oil?

First of all, I believe Givot Olam discovered oil 13,000 feet below the surface in 2004.  Secondly, while the oil is still 13,000 feet down, I don’t believe there’s any ironclad way of determining exactly how much was discovered or, more importantly, how much of the oil in the ground is producible to the surface.  And (this is an important part of the oil business) you can only send oil to the refinery that’s that’s actually on the surface.

What’s the moral of this story?

Discovering oil and producing oil are two separate and distinct events. Sometimes they happen back to back … but sometimes they don’t. And how much time and capital an oil company thinks exploration and completion will cost, reality may have a higher figure in mind. In a recent interview, Zion Oil & Gas Exploration Manager Stephen Pierce stated that the odds of finding oil in the exploration process are “one in nine.” That means, on average, nine wells are drilled for every one that produces. But not one of the oil explorers I’ve interviewed or researched in the history of Israel’s hunt for oil expected to drill nine holes before discovering oil. Every well was expected to be the well. That, unfortunately, isn’t the way it is.

Here’s the good news.

Israel possesses a massive amount of natural gas – more than they’ll need into the foreseeable future. Israel’s natural gas was discovered just last year. And Israel possesses oil – that’s been proven by exploration and, I believe, it will be confirmed by discoveries outside the Meged field in the near future. The gap between ‘discovery’ and ‘production’ may be time consuming and expensive (as it has been in Givot Olam’s case), but once fields begin producing they generally continue. Israel will be energy independent; she will produce and consume domestic oil and gas, all Givot Olam and the other oil exploration companies in Israel need to do is stay in business. Givot Olam will raise the capital to finish the Meged #5. Will the well produce oil or gas? I don’t know, but I do know they’re a lot closer to the finish line than when they started.

Below is the February 28 Globes article on Givot Olam:

“The quantities of gas measured in the mud of the Meged 5 well is ten times the amount in all other wells in the Meged field,” Givot Olam Oil Exploration LP (TASE:GIVO.L) announced today in a presentation ahead of Tuesday’s partners meeting. At the meeting, the general partner will try to get the investors’ approval to issue NIS 25 million worth of partnership units and options.

Givot did not disclose the actual quantity of gas measured in the well, or its significance for the quantity of oil at the site, which will only be known when the production tests are completed.

Givot’s general partner added that the drilling cost of the Meged 5 well is $12.6 million, more than the $7.7 million originally planned. The general partner attributed the higher cost to “two serious breakdowns during the drilling and adjustments to the drilling plan”.

The presentation added that the Meged 5 has reached the Upper Mohila strata at a depth of 3,879 meters, and that the well is due to reach a depth of 3,950 meters. The partnership estimates the cost of the production tests at $6 – 7.5 million and they will last for two more months. The partnership has just $3.7 million in cash left, hence the need to raise more capital.

Published by Globes [online], Israel business news – www.globes-online.com – on February 28, 2010

Noble Energy plans $530m investment in Israel

The company plans to resume exploration in the Eastern Mediterranean.

Amiram Barkat21 Feb 10 16:56

Oil and gas exploration company Noble Energy Inc. (NYSE: NBL) will invest $530 million in natural gas exploration in Israel and in development of its current reserves at Yam Tethys and Tamar, said company executives during a conference call on Friday.

During the conference call, which followed the publication of Noble Energy’s financial report for the fourth quarter of 2009, Noble Energy chairman and CEO Chuck Davidson said, “Late in the year, we anticipate resuming exploration in the Eastern Med, looking to build on our tremendous success that we’ve had already there in Israel.”

The reference is to economic zones of Israel and Cyprus, probably at the company’s Leviathan license, west of Tamar. Leviathan is jointly owned by Noble Energy, Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L). Drilling will probably begin after the recently completed 3D seismic study of the strata structure is analyzed.

Noble Energy said that its capital program in 2010 will total $2.5 billion, $1 billion for major projects, most of which will be directed to projects in the Gulf of Mexico, Equatorial Guinea in West Africa, and Tamar.

Noble Energy said that natural gas sales in Israel were 25% lower in 2009 than in 2008. Sales are from the Yam Tethys field offshore from Ashkelon, in which Noble Energy owns 47.1%, with Delek (4.44%) and its subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) (23%) and Delek Drilling LP (TASE: DEDR.L) (25.5%) owning the rest.

Davidson said, “Internationally, we had tremendous exploration success in Israel, with our largest discovery ever at Tamar and subsequent Dalit find. We announced signed letters of content covering $10.5 billion in gross expected revenue, with less a third of resources committed. And we immediately moved forward with the development plans that should lead to the sanction of Tamar this year.”

The Tamar partners today announced that they have signed a third letter of intent for the sale of natural gas to Dimona Silica Industries Ltd. The 17-year contract is worth $500 million. Noble Energy owns 36% of the Tamar prospect, alongside Delek Drilling, Avner Oil, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd.

Noble Energy attributed the lower than expected natural gas sales in Israel to warmer than normal weather, increased imports of competing Egyptian gas (from East Mediterranean Gas Company (EMG), which began deliveries in early 2009), and because the company’s customer, Israel Electric Corporation (IEC) (TASE: ELEC.B22) had some downtime on one of their power plants.

Investment house Barclays Capital reiterated its “Overweight” rating on Noble Energy stock, and kept its target price for the share at $84. However, it cut its earnings per share estimate as production guidance figures ranged lower than Barclays analysts had expected. They nevertheless maintain that strong future production growth, beginning in 2012, will support the shares.

Israel Oil & Gas Exploration Boom Continues

Haaretz

Israel has natural gas fever, to judge by the line at the National Infrastructure Ministry’s oil board. “Even when they discovered the Heletz field in the south [in 1955] people weren’t lining up here, but this time even leading financial institutions have been backing all kinds of searches,” a member of the ministry’s oil board told TheMarker. The board member, Ron Nahman, who is also mayor of Ariel, said, “We haven’t had this many requests and inquiries in the past nine years. There’s never been interest like this.” Nahman and the other eight board members are responsible for allocating drilling and exploration rights within Israel and off the country’s shores. (Avi Bar-Eli)

Virtual Jerusalem

The Oil Law advisory council at the Ministry of National Infrastructures met on Monday to review and discuss applications for oil and natural gas exploration licenses and oil production licenses. The council reviewed many applications for oil and natural gas licenses, including oil shales and the transfer of rights.

The council approved six applications:

• A license for Modiin Energy LP for the Yam Hadera prospect.
• A preliminary permit with forward rights for Zerah Oil And Gas Explorations LP and Ginko Oil Exploration LP for the Gulliver offshore prospect.
• A license for Ginko for the land Orly prospect.
• A license for Swiss-based Rig Builders Contracting SA for the land Gurim prospect.
• A license for Dr. Baruch Drin Consultants and Services Ltd. and Griffin Strategic Investments Ltd. for the land Yahel prospect.
• A license for ACC Resources Ltd. for land Shemen prospect (in the Med Ashdod area).

The initial permit is for a maximum of 18 months for an unlimited area, during which preliminary surveys are conducted, including the collation of all current material as well as new material to fill in the information gaps. When the permit period expires, the licensee must apply for a drilling prospect.

A license is for three years, with an option for renewal, and requires drilling a well. An extension is for a maximum of seven years.

If and when commercial quantities oil or gas are discovered, the license is for a maximum of 50 years. The holding will not be granted for more than 30 years in the first stage, and only subject to justifying the reservoir’s potential.

Zerah and Ginko get Negev gas exploration license

The Orly prospect is north of Arad.

Globes Online: Mira Awwad 16 Feb 10 17:46

The Orly license covers a 102,400 (50,600-acre) area in the southern Judean Desert, above the Dead Sea.

Under the terms of the license, Zerah and Ginko will conduct a 2D seismic survey of the prospect by mid-October 2010, analyze the results and submit a drilling proposal by mid-February 2011. They will begin drilling a 2,000-meter well by mid-October 2011, and submit a report for further operations at the well within four months of the completion of the well.

Last week, Zerah obtained the offshore Gulliver license.

Bontan Announces Two More Huge Israeli Gas Fields

Canada’s Bontan Corporation Inc. (Bulletin Board: BNTNF) subsidiary Bontan Oil and Gas Exploration today announced that its Mira and Sarah prospects offshore from Israel have up to 6 trillion cubic feet of natural gas, worth up to $7.54 billion, at current prices.

The Mira and Sarah prospects are located just south of the Tamar and Dalit prospects, where Delek Group Ltd. (TASE: DLEKG) and its partners, Noble Energy Inc. (NYSE: NBL), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd found natural gas last year, which some sources estimate to be worth up to $40 billion. The prospects are north of Yam Tethys’ Mary prospects offshore from Ashkelon, BG Group plc’s (NYSE; LSE: BG) undeveloped fields offshore from Gaza, and East Mediterranean Gas Co. (EMG) fields offshore from El Arish in Sinai.

Bontan’s prospects are just north of the Gabriella prospect, which Modiin Energy LP (TASE:MDIN.L) acquired 70% of from Canada’s Adira Energy Corporation (XETRA: AORLB8; Bulletin Board: AMGOF) subsidiary Adira Energy Israel Ltd. last week.

The Evaluation Report prepared by Chapman Petroleum Engineering Ltd. estimates that the Mira prospect has 3.03-5.45 trillion cubic feet of gas, with the best estimate of 4.24 trillion cubic feet. The Sarah prospect has 1.05-1.89 trillion cubic feet of gas, with a best estimate of 1.47 trillion cubic feet.

According to Chapman, the present value of gas in the Mira prospect is $2.54-5.37 billion, with $3.96 billion as the most likely amount. The value of gas in the Mira prospect is $1.02-2.17 billion, with $1.59 billion as the most likely amount. The probable value of the gas at the two prospects is $5.55 billion.

Bontan indirectly owns 71.625% of the Mira and Sarah prospects through its 75% stake in Israel Petroleum Company, which owns 95.5% of the drilling licenses.

Chapman concludes, “Based on our analysis, after consideration of risk, we have concluded that the potential of these prospects is of sufficient merit to justify the work program being proposed, and we therefore recommend and support the company’s participation.”

The Mira and Sarah Drilling Licenses are adjoining 154-square mile blocks located 50-100 kilometers offshore from the Netanya-Hadera area. No exploratory drilling has been done on either block to day. A 3D seismic survey was completed on both blocks in late 2009 and is currently undergoing analysis.

Bontan CEO Kam Shah said, “The company is very pleased with the results of the Evaluation Report on these offshore Israeli prospects. This independent technical assessment confirms that these exploration blocks are indeed world class assets and completely justify the company’s investment of time and capital in this highly significant project. A review of global exploration discoveries in 2009 just published by the American Association of Petroleum Geologists also reported that the recent offshore Israel natural gas discoveries were among the most significant in the world. This independent technical report places the company’s prospects in the same geological setting as the 2009 offshore Israel discoveries. Our next step is the completion of the processing and interpretation of the 3D geophysical survey acquired over the Mira and Sarah drilling licenses. Firm drilling locations can then be selected on both prospects and application made to the Government of Israel to commence an exploratory drilling program.”

‘Black Gold’ Rush Hits Israel’s Stock Market

The Israeli stock exchange (TASE) closed up yesterday. One of the shining stars in Israel’s trading economy? Oil and gas companies. Israeli Haaretz newspaper reported today:

“Over here, if anything’s hot it’s the oil and gas sector. After having gained 2,470% in the past four months, units of oil exploration partnership Modi’in rose another 9.1% yesterday. The company pulled off a NIS 20 million rights issue that took it of the Maintenance List of companies not in compliance with Tel Aviv Stock Exchange listing rules.” (read Haaretz article)

Naphtali and Bubblin’ Crude?

A friend of mine, Tom Boulting at Charter Films, Ltd. (they’re the folks producing the Zion Oil movie) sent me a note this week about a passage of scripture – Deuteronomy 33:23. “And of Naphtali he said, ‘O Naphtali, sated with favor, and full of the blessing of the Lord, possess the lake and the south.’”

This was Tom’s question: “I know that the next verse refers to Asher and dipping his foot in oil and I may be stating the obvious, but isn’t naphthalene a hydrocarbon and where is ‘the lake’ and ‘the south’? This may be irrelevant, but I just came across it and wondered if you had noticed the Naphtali/naphthalene connection.”

Tom is a wonderful guy and a great filmmaker, but he’s not a scientist or a theologian. My first impression was that he saw the name of the ancient Israeli tribe ‘Naphtali’ and made a connection (that wasn’t there) with the modern term ‘naphthalene’ – a hydrocarbon solid. It’s just a coincidence that Naphtali and Naphthalene sound the same; the two words are separated by centuries, languages and cultures. But Tom is a friend and I wanted to explain the difference between the words. I didn’t want him making connections where there weren’t any. To prove my point I researched the words, their meanings and their root … boy, was I surprised! That ‘Naphtali’ and ‘Naphthalene’ sound the same may be a coincidence, but the more I looked into it, the more the ‘coincidences’ stacked up. At this point I’m not sure what to think of the Naphtali/Naphthalene connection but it’s a pretty interesting point to ponder.

Pulling apart the words

In Hebrew “Naphtali” means “my struggle” or “I wrestle”. It was the name Jacob’s wife, Rachel gave to her second son through her maid-servant Bilhah. Rachel was “wrestling” with big sister Leah in a baby making contest. Between the two sisters and their maid-servants, they produced twelve offspring for husband Jacob, all of whom would eventually become (with a little rearranging by G_d and Joseph’s two boys) the twelve (or thirteen) tribes of Israel.

“Naphthalene” is a two part ‘scientific’ word – “naphtha” (a broad term referring to any number of liquid hydrocarbon mixtures) and “lene” (a suffix defining the object as a derivative of the root preceding). In street terms, “naphthalene” means literally “derived from naphtha”.

Stay with me – we’re about to discover something interesting!

The word “Naphtha” (a broad term for liquid hydrocarbon products) comes from a Latin term for what we know today as petroleum (which is also Latin – petro = rock, oleum = oil).  The Latin “naphtha” comes from the Greek “naphtha”, again, meaning petroleum. Want to guess where the Greek “naphtha” comes from? The Greeks got their word for petroleum from the Arabs (“naft”) and Hebrews (“neft”)!

But you’re not going to find “neft” in the Bible. The ancient Hebrews knew about petroleum oil but they called it “chemar” – the closest English translation we have today is “bubblin’ crude”, Jed Clampett style. I kid you not, that’s what the ancient Hebrews called oil from natural seeps in the Promised Land – ‘bubblin’ crude’. Jed would have been proud.

As far as I know the word “neft” didn’t come into Hebrew usage until after the Babylonian captivity. Liquid hydrocarbon seeps were also a natural phenomenon in Babylon (modern day Iraq) and the Jews brought the Babylonian term back with them. Israeli’s still use the term today.

So, does the ancient tribe of ‘Naphtali’ have any connection at all with the modern term for a petroleum product? Or is the similarity in sound just a coincidence?

Here’s where the ‘coincidences’ start to stack up.

1. The name ‘Naphtali’ is still around; but it’s now spelled ‘Neftali’.

2. The tribe of Naphtali was given land in the far north, above the Sea of Galilee (the lake of Deut 33:23) and west of the Golan Heights. On Naphtali’s western border lies Asher (“he shall dip his foot in oil”) and on its southern border lies Zebulun (“he shall suck of the abundance of the seas and of treasures hid in the sand”) – both neighboring tribes with a prophesied promise relevant to our search for oil.

3. Today Naphtali’s land is home to the Hula Valley, the suspected site of significant gas reserves and currently under exploration license with Adira energy.

4. Naphtali’s territory sits next to Asher’s and its blessing (Deut 33:23) is recorded next to Asher’s (Deut. 33:24). Naphtali’s blessing states that he will be ‘sated’ (filled up) with ‘favor’ and ‘full of blessing’.

Add those ‘coincidences’ up and we may have another piece to the Great Treasure Hunt puzzle! As I said earlier, I’m not sure what to think of the Naphtali/Naphthalene connection at this moment, but it’s a pretty interesting ‘coincidence’. I’ll keep you posted as exploration unfolds in the land of Naphtali.

P.S. In her 1997 novel The Jewish War, Tova Reich’s character Heshie Finkel, a young mathematical genius, is charged with the task of deciphering the mystical significance of ‘neft’ in order to bring oil to Israel. After extended study and the counsel of an aged rabbi he has an epiphany that ‘neft’ will come to Israel with the coming of the Messiah. Reich, a secular satirist, was poking fun; she didn’t mean for the connection between ‘neft’ and the Messiah to be mystical or prophetic. But some truths have a way popping up even when you’re not looking for them. If she turns out to be right I’ll drop her a note.

Yossi Langotsky, Israel’s Unlucky Oil Man

On November 30 the Wall Street Journal printed the story of Yossi Langotsky, an Israeli who has been searching for oil in the Promised Land for fifty years. The WSJ story focuses on Yossi’s involvement in Israel’s recent off-shore gas discovery and how he was left behind in its reward.

I met Yossi almost five years ago and learned about his role in the search for Israel’s oil. It was early April, 2005; Elaine and I had been invited to the Zion Oil & Gas  ‘Ma’anit #1′ spudding (beginning drilling operations) ceremony; the company’s first oil well drilling project in Northern Israel. Before the ceremony we were introduced to Mr. Langotsky, and then aside, we learned the unfortunate story of Yossi’s relationship to the Ma’anit #1.  The hole in which Zion Oil was to begin drilling in the spring of 2005 was, at that time, already 7,661 feet deep. This spudding ceremony wasn’t the first for the Ma’anit #1; in 1995 and Yossi headed the first drilling of the Ma’anit #1, but at 7,661 feet the project had run out of money and the hole was abandoned. Zion Oil & Gas reopened the Ma’anit #1 in 2005, drilled to 15,500 feet and then abandoned the well due to mechanical problems. Earlier this year, Zion re-opened the Ma’anit #1, now dubbed the ‘Ma’anit-Rehoboth #2′ and drilled directionally to a total depth of 17,913 feet.

Today seven zones of the Ma’anit-Rehoboth #2 are being tested for hydrocarbon (oil and gas) potential.  According to Zion CEO Richard Rinberg, in his October 30 newsletter, “With regard to our log analysis, an independent log analyst noted that the Ma’anit-Rehoboth #2 well does have a specified amount of potential ‘net pay’.” Although he was quick to warn readers, “You will appreciate that, until such time as we recover hydrocarbons at the surface (or not), we are not able to give any estimates of what (if anything) we believe we may recover.”

At this point,  whether or not the Ma’anit-Rehoboth #2 becomes a productive well, no one knows. Whatever happens, Yossi Langotski, the man who chose the location and drilled the first 7,661 feet, once again, will have his share of the bragging rights but not the profits. Below is the WSJ story.

For One Man, Israel’s Big Gas Find Is Bittersweet Victory

Wall Street Journal

By CHARLES LEVINSON

HERZLIYA, Israel — Two natural-gas fields in Israel’s Mediterranean waters were found in January to contain enough resources to meet Israel’s energy needs for 20 years — a huge find after more than half a century of lackluster carbon exploration here.

But for Yossi Langotsky, who for 10 years has been the driving force behind the project, the gusher was a bittersweet victory. He has been drilling holes in the Promised Land for nearly four decades, in a mostly futile search for energy. A month before drilling started on what would become the largest find in Israeli history, his financial backer pulled out. That forced him to relinquish his stake — today valued at an estimated $350 million.

“After 60 years of no success in oil exploration here in Israel, a miracle took place, and I lost out 30 days before it happened,” says Mr. Langotsky, 75 years old.

The pivotal role played by Mr. Langotsky in the historic discovery is undisputed. The two fields are named for his daughter, Dalit, and granddaughter, Tamar.

The fields, which won’t start producing gas until 2014, are relatively modest by Mideast standards. But they have already triggered a frenzy in the country’s quiet energy industry.

Since January, Israeli oil companies’ stocks have soared, some rising as much as tenfold. In 2009, oil companies have invested between five and 10 times as much in Israel exploration as at any point in the country’s history, says Yaakov Mimron, head of Israel’s Petroleum Commission.

In recent weeks, two international companies, including Houston-based Noble Energy Inc., which led the team that made the gas find in January, separately began extensive and costly 3D seismic surveys of more offshore prospects. A Noble spokesman said they expect to drill new wells next year.

In the past 60 years, oil companies have drilled about 450 wells, but choked out just 20 million barrels of oil, less than Saudi Arabia churns out in three days.

Israel’s dearth of oil in a region awash in it became a national joke. “My closest friends laughed at me,” says Mr. Langotsky.

Many Israeli oil geologists quit the profession. Many of those who stayed are a touch unconventional by industry standards. The two exploration companies currently drilling for oil onshore in Israel are both run by pious prospectors, one an Orthodox Israeli Jew and the other a born-again evangelical Christian from Texas. They both use a combination of biblical prophecy and sound geological data to decide where to drill.

Mr. Langotsky began his oil career as a graduate student in the late 1950s, studying oil prospects along the Dead Sea. He left the profession when he was called on to serve in the army. He played a prominent role commanding an elite reconnaissance unit that helped capture Jerusalem from the Jordanians in the 1967 war.

After leaving the army in 1979, Mr. Langotsky returned to the oil business. For most of the next two decades he roamed Israel, drilling as many as 60 wells.

In the 1990s, Mr. Langotsky and a handful of others began looking offshore. Israel’s fortunes started to turn with a series of moderate-size gas finds in waters off the coast of southern Israel and Gaza.

It was then that Mr. Langotsky first turned his attention to a vast tract of territory deep underwater in the Mediterranean Sea, farther offshore than others were looking.

He pitched the prospect to about 100 top international oil firms, he says. They all turned him down, except for Britain’s BG Group PLC, which agreed to form a partnership with Israeli companies to study the site. The site was set to drill in 2002, but then the project snagged.

Drilling costs in such deep waters nearly 60 miles offshore would likely reach hundreds of millions of dollars, and the partner firms started squabbling about who would shoulder what percentage of the risk. There were also technical problems. Many international oil companies were wary of working in Israel, for fear of alienating oil-rich Arab governments.

Companies started dropping out, including, in 2005, BG itself. The company said the project wasn’t one of its drilling priorities at the time. Eleven different companies were in and out of the project at various times in the nine years it took to start drilling.

At last, in 2007, Noble, a midsize Texan oil company, agreed to buy a 35% stake and take over operations.

Since the project’s conception in 1999, Mr. Langotsky remained its public face. He convinced new firms and investors to join whenever one dropped out, and lobbied the Israeli government.

“If Yossi had not been there, then things would be looking quite different today,” says Charlie Druckman, Israel’s petroleum commissioner until 2004.

Early in the project, BG offered Mr. Langotsky the chance to buy a 5% stake. Unable to finance the stake himself, he brought in Israeli billionaire diamond and real-estate magnate Benny Steinmetz, who agreed in 1999 to buy the stake and give Mr. Langotsky one-fifth of his share, Mr. Langotsky said.

But in the summer of 2008, amid the global financial crisis, another infusion of cash was needed to start drilling, and Mr. Steinmetz balked, according to Mr. Langotsky. He said he would no longer invest in the project, relinquishing his 5% stake — including the share pledged to Mr. Langotsky, according to Mr. Langotsky. Other investors in the project took over the stake.

Mr. Langotsky still had the option to buy a 5% stake, but couldn’t find an investor to back him. Soon after, Noble announced the big find at Tamar, followed by the smaller Dalit field — finds amounting to nearly 1.2 billion barrels of oil equivalent. Mr. Langotsky was left with nothing but bragging rights.

Mr. Langotsky has captured some sympathy from industry colleagues and in the Israeli media. In the Israeli media’s portrayal of the situation, Mr. Steinmetz has been vilified. In September, Israel’s leading economic newspaper named him most in need of forgiveness for Yom Kippur, the Jewish day of atonement, for leaving Mr. Langotsky in the cold.

Supporters of Mr. Steinmetz say it didn’t make sense to continue with a risky, capital-intensive oil venture at a time of global economic uncertainty.

Mr. Langotsky remains defiantly upbeat. The son of early Zionist pioneers who valued duty to country over self, he insists his passionate search for oil was never about the money. “I’m very proud; I feel great,” he says. “I am totally disappointed that I failed to keep my rights, but this discovery is one of the greatest achievements of my life.”

Write to Charles Levinson at charles.levinson@wsj.com

Wall Street Journal Interviews John Brown

The Wall Street Journal recently interviewed Zion Oil & Gas Founder John Brown in Israel and produced a short video for their viewers. John Brown speaks of his faith and the search for Israel’s oil. To view the Wall Street Journal video, just click on the play button below.

Canada’s Bontan moves into Israel

TORONTO, Nov. 24 (UPI) — Canada-based Bontan Corp. Inc. announced the indirect acquisition of exploration and drilling licenses in the Levantine Basin off the coast of Israel.

Bontan said the two drilling licenses and one exploration permit cover a total area of more than 1,000 square miles in the Israeli waters of the Mediterranean Sea.

The Israeli Petroleum Co. holds the 75 percent equity interest in the project area for Bontan.

Wells associated with the Levantine Basin hold an estimated 6.8 trillion cubic feet of probably gas reserves, which Bontan said is the second largest discovery in the world made in nearly two years.

“With the 6.8 trillion cubic feet discoveries north of the project assets, the possibility of significant hydrocarbon deposits on our project area exists,” said Kam Shah, chief executive officer of Bontan

The company said it was in the process of obtaining the necessary permits for further analysis of the Levantine Basin.

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